Question 1

What factors explain why high-skilled workers are paid more than low-skilled workers?

Accepted Answer

High-skilled workers have a higher value of marginal product than that of low-skilled workers. This fact causes the demand for high-skilled labor to exceed that of low-skilled labor and is one reason why high-skilled workers' wages are higher than low-skilled workers' wages. In addition, high-skilled workers require compensation for having acquired the skill. Thus, the supply of high-skilled labor is less than the supply of low-skilled labor, which also causes the wages paid high-skilled workers to exceed those paid low-skilled labor.

Question 2

In the United States, the Lorenz curve for wealth is ________ from the 45-degree line than is the Lorenz curve for income, which means that the distribution of wealth is more ________ than the distribution of income.

Accepted Answer

A)  farther away from; unequal 
B)  farther away from; equal 
C)  closer to; unequal 
D)  closer to; equal 
A)  farther away from; unequal 
B)  farther away from; equal 
C)  closer to; unequal 
D)  closer to; equal A

Question 3

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of total income?

Accepted Answer

The poorest 20 percent of households receive less than 5 percent of total income.

Question 4

Money income is

Accepted Answer

A)  market income plus cash payments from government. 
B)  equal to market income. 
C)  market income plus cash payments from government minus taxes. 
D)  market income minus taxes. 
A)  market income plus cash payments from government. 
B)  equal to market income. 
C)  market income plus cash payments from government minus taxes. 
D)  market income minus taxes.

Question 5

Albert, Betty, and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below.   The income tax in Norland is

Accepted Answer

A)  proportional. 
B)  fair. 
C)  regressive. 
D)  progressive. 
A)  proportional. 
B)  fair. 
C)  regressive. 
D)  progressive.

Question 6

With a proportional tax

Accepted Answer

A)  a poor household pays a larger percentage of its income in taxes than a rich one. 
B)  a rich household pays a larger percentage of its income in taxes than a poor one. 
C)  all households pay the same total amount of tax. 
D)  all households pay the same percentage of their income as taxes. 
A)  a poor household pays a larger percentage of its income in taxes than a rich one. 
B)  a rich household pays a larger percentage of its income in taxes than a poor one. 
C)  all households pay the same total amount of tax. 
D)  all households pay the same percentage of their income as taxes.

Question 7

At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?

Accepted Answer

For the welder the cost of acquiring his

Question 8

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

Accepted Answer

A)  0 percent 
B)  10 percent 
C)  20 percent 
D)  40 percent 
A)  0 percent 
B)  10 percent 
C)  20 percent 
D)  40 percent

Question 9

Which of the following statements is TRUE?

Accepted Answer

A)  Both wealth and income measure variables over a period of time. 
B)  Wealth measures a variable at a point in time and income measures a variable over a period of time. 
C)  Wealth measures a variable over a period of time, and income measures a variable at a point in time. 
D)  Both wealth and income measure variables at a point in time. 
A)  Both wealth and income measure variables over a period of time. 
B)  Wealth measures a variable at a point in time and income measures a variable over a period of time. 
C)  Wealth measures a variable over a period of time, and income measures a variable at a point in time. 
D)  Both wealth and income measure variables at a point in time.

Question 10

-In the figure above, the richest 20 percent of households receive ________ of total income.

Accepted Answer

A)  55 percent 
B)  45 percent 
C)  80 percent 
D)  60 percent 
A)  55 percent 
B)  45 percent 
C)  80 percent 
D)  60 percent

Question 11

Country A has a more equal distribution of income than country B if

Accepted Answer

A)  country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B)  country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C)  country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D)  None of the above because it is impossible to compare income inequalities across countries. 
A)  country A's Lorenz curve is closer to the line of equality than is country B's Lorenz curve. 
B)  country B's Lorenz curve is closer to the line of equality than is country A's Lorenz curve. 
C)  country A's Lorenz curve is just as close to the line of equality as is country B's Lorenz curve. 
D)  None of the above because it is impossible to compare income inequalities across countries.

Question 12

The distribution of income in the United States is skewed so that the mode level of household income is ________ the median household income and the median household income is ________ than the mean household income.

Accepted Answer

A)  less than; less than 
B)  less than; greater than 
C)  greater than; greater than 
D)  greater than; less than 
A)  less than; less than 
B)  less than; greater than 
C)  greater than; greater than 
D)  greater than; less than

Question 13

What is "human capital"? How is it important in the determination of a worker's wage rate?

Accepted Answer

Human capital is the skill, education, a

Question 14

-The above table shows the distribution of wealth and income in Miseria. What percent of wealth is owned by the poorest twenty percent?

Accepted Answer

A)  0 percent 
B)  2 percent 
C)  3 percent 
D)  5 percent 
A)  0 percent 
B)  2 percent 
C)  3 percent 
D)  5 percent

Question 15

Pamela Michelle Scott, a low income single mom, had just finished her monthly shopping to purchase 30 days' worth of meat from Hollins Market. She's reared five healthy children and said that she made good use of the free health clinics and food stamps. Pamela benefits from free health clinics which are ________ and food stamps which is a ________.

Accepted Answer

A)  Social Security programs; subsidized service 
B)  unemployment compensation programs; Social Security program 
C)  subsidized services; welfare program 
D)  welfare programs; unemployment compensation program 
A)  Social Security programs; subsidized service 
B)  unemployment compensation programs; Social Security program 
C)  subsidized services; welfare program 
D)  welfare programs; unemployment compensation program

Question 16

-The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn

Accepted Answer

A)  90 percent of the income. 
B)  11 times as much as the poorest twenty percent. 
C)  9 times as much as the poorest twenty percent. 
D)  just as much as the second richest twenty percent. 
A)  90 percent of the income. 
B)  11 times as much as the poorest twenty percent. 
C)  9 times as much as the poorest twenty percent. 
D)  just as much as the second richest twenty percent.

Question 17

Since 1970, the U.S. Gini ratio has

Accepted Answer

A)  increased. 
B)  decreased. 
C)  increased and then decreased. 
D)  decreased and then increased. 
A)  increased. 
B)  decreased. 
C)  increased and then decreased. 
D)  decreased and then increased.

Question 18

-In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be

Accepted Answer

A)  more unequal. 
B)  more equal. 
C)  unchanged. 
D)  More information is needed to determine how this change would affect the income distribution. 
A)  more unequal. 
B)  more equal. 
C)  unchanged. 
D)  More information is needed to determine how this change would affect the income distribution.

Question 19

-In the above figure, an innovation that increases the demand for high-skilled workers and decreases the demand for low-skilled workers will

Accepted Answer

A)  reduce the amount by which WH exceeds WL. 
B)  increase the amount by which WH exceeds WL. 
C)  shift the SH curve leftward. 
D)  shift the SL curve rightward. 
A)  reduce the amount by which WH exceeds WL. 
B)  increase the amount by which WH exceeds WL. 
C)  shift the SH curve leftward. 
D)  shift the SL curve rightward.

Question 20

-In the figure above, in the market for low-skilled labor, the equilibrium wage rate is

Accepted Answer

A)  $16. 
B)  $8. 
C)  $20. 
D)  $28. 
A)  $16. 
B)  $8. 
C)  $20. 
D)  $28.

What factors explain why high-skilled workers are paid more than low-skilled workers?

In the United States, the Lorenz curve for wealth is from the 45-degree line than is the Lorenz curve for income, which means that the distribution of wealth is more than the distribution of income.

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of total income?

Money income is

Albert, Betty, and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below. The income tax in Norland is

With a proportional tax

At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

Which of the following statements is TRUE?

-In the figure above, the richest 20 percent of households receive ________ of total income.

Country A has a more equal distribution of income than country B if

The distribution of income in the United States is skewed so that the mode level of household income is the median household income and the median household income is than the mean household income.

What is "human capital"? How is it important in the determination of a worker's wage rate?

-The above table shows the distribution of wealth and income in Miseria. What percent of wealth is owned by the poorest twenty percent?

-The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn

Since 1970, the U.S. Gini ratio has

-In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be

-In the above figure, an innovation that increases the demand for high-skilled workers and decreases the demand for low-skilled workers will

-In the figure above, in the market for low-skilled labor, the equilibrium wage rate is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

Exam 19: Economic Inequality

What factors explain why high-skilled workers are paid more than low-skilled workers?

In the United States, the Lorenz curve for wealth is ________ from the 45-degree line than is the Lorenz curve for income, which means that the distribution of wealth is more ________ than the distribution of income.

In the United States, do the poorest 20 percent of the households receive more or less than 5 percent of total income?

Money income is

Albert, Betty, and Cecile live in Norland. Their annual incomes and the amounts they pay in income tax are shown in the table below. The income tax in Norland is

With a proportional tax

At any wage rate, the quantity of welders willing to work is less than the quantity of tomato pickers. Why?

-The above figure shows the Lorenz curve for wealth for the nation of Rusha. The poorest forty percent of the population own what percent of wealth?

Which of the following statements is TRUE?

-In the figure above, the richest 20 percent of households receive ________ of total income.

Country A has a more equal distribution of income than country B if

The distribution of income in the United States is skewed so that the mode level of household income is ________ the median household income and the median household income is ________ than the mean household income.

What is "human capital"? How is it important in the determination of a worker's wage rate?

-The above table shows the distribution of wealth and income in Miseria. What percent of wealth is owned by the poorest twenty percent?

-The above table shows the distribution of wealth and income in Miseria. With respect to income, the richest twenty percent of the population earn

Since 1970, the U.S. Gini ratio has

-In the above figure, if the Lorenz curve were to move closer to the diagonal line containing points b and c, the income distribution would be

-In the above figure, an innovation that increases the demand for high-skilled workers and decreases the demand for low-skilled workers will

-In the figure above, in the market for low-skilled labor, the equilibrium wage rate is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Uncertainty and Information

Filters

In the United States, the Lorenz curve for wealth is from the 45-degree line than is the Lorenz curve for income, which means that the distribution of wealth is more than the distribution of income.

The distribution of income in the United States is skewed so that the mode level of household income is the median household income and the median household income is than the mean household income.